Trading Systems blogs

VIC stands for Value Investor's Club. As I've mentioned before, upon registration, guests can access VIC member posts on a 45 day delayed basis. If you're searching for some unique stock ideas, I highly recommend signing up (it's free, just do it). Ideas are very well researched and professionally presented. As a matter of fact, yesterday I initiated a position in a co. I initially read about on VIC. The company is Overhill Farms (OFI). A more detailed write-up on OFI will follow, but for now, here are some other VIC ideas that might make some sense:

Discovery Holdings (DISCA) is a recent spin-off from Liberty Media. It's main asset is a 50% stake in Discovery Communications (TLC, Discovery Channel, Travel Channel, Animal Planet). These are some of the most popular stations that are not yet part of a media conglomerate (e.g. Time Warner). Besides VIC, the The Holy Grail of Value Investing
at 2006-03-22 12:07:02

What is it? I don't know. Where is it? Maybe it's in Seth Klarman's "Margin of Safety." No, I decided not to fork over the $700 for this mysterious tome; my library is going to snag me a copy. I'll let you know if I come across any nuggets. I'm also just getting into Thorton O'Glove's "Quality of Earnings." So far, so good.

my newest position -- Overhill Farms (OFI)
at 2006-03-22 12:07:02

OFI is a stock that came across my radar screen via VIC. Before I begin, note that OFI is a microcap stock and my track record with stocks in this area is poor. But these mistakes have been in the sexy sectors -- biotech, medtech, any tech. One difference here is that OFI is decidedly unsexy. OFI manufactures frozen food products (entrees, meal components, soups, sauces, poultry,meat, fish). The current share price is $3.66, market cap of $55 million. FY05 sales were $162.6 million.

Here's what I like about OFI:

Sales were up 21.4% in 2005

Income statement ratios moving in the right direction (05 vs. 04)--GM% at 12.2% vs. 10.7%, SGA% at 4.8% vs. 6.0%, Op margin 7.3% vs. 4.7%.

Panda Restaurants and Jenny Craig are OFI's two largest customers (combined 50% of business). Both have been growing smartly.

OFI's move into a new maufacturing facility seems to have been behind the op. expense improvement a

news and notes
at 2006-03-22 12:07:02

Int'l Game Tech. (IGT) has been on fire of late. Co. reported very strong quarterly #s. Particularly impressive were gains in ARPU and non-machine sales. Here's the Mark Sellers interview where he discusses IGT {Note I am long IGT}

JP Morgan has been pushing Tweeter (TWTR) hard prior to its earnings report tommorrow. Stock could move $1 either way on a beat or a miss. I'm hoping for a beat and a run into the $7's to short into. Also, something on TWTR that I believe I failed to mention earlier is that the auditors noted weaknesses in financial controls in their most recent 10k.

My favorite confectionary co. is coming back to me. Wrigley is down to about $64 now from $70ish a few months ago. Another 10% move lower

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Stock Market And Monetary Liquidity
at 2006-03-22 12:07:01

The stock market has been sensitive to changes in the
levels of Fed Credit and the Adjusted Monetary Base (AMB)
since mid-2003. This has been so because traders have
taken to monitoring The Federal Open Market Commitee's
doings carefully as the economy has expanded to glean
changes in monetary policy. The Fed has tightened up
gradually on liquidity since late 2003, and took a
tough line in 2005, until Katrina etc. forced it to
ease up some. The periodic increases to Fed Credit
via reserve injection have led stock and gold traders
particularly to celebrate. Each stock market rally
since Half 2 '04 has been triggered off by FOMC
Treasuries purchases which have quickly showed up in
the AMB.

It is too early to tell yet whether the Fed will extend
the moderate net easing of recent months, although
seasonal factors mitigate against it. Moreover, traders
should note that the stock market is abou

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